This season the FIA moved to close a loop hole in the financial regulations that restrict the Formula One teams spending. The budget cap as it is known has now been part of the sport since 2021 and is designed to level the playing field by removing the crushing seeding power of the larger teams.
Mercedes Ferrari and Red Bull were forced to slash their spending in order to meet the budget cap and this season the FIA over to close a loophole whereby the larger teams had retained the ability to ‘outsource’ certain activities.
FIA restrict Intellectual Property
A number of the teams have satellite companies which undertake projects not related to Formula One however as TJ13 reported last season, the lines were blurred between various projects and staff would be working part time in F1 and part time elsewhere.
Mercedes recently reappointed James Allison as their technical director however he had for two years been overseeing the INEOS Britannia’s project to build a boar for the America’s Cup.
Otmar Szafnauer of Alpine had repeated made the case that other teams were operating in a grey area which could result in ‘free knowledge’ being obtained for their F1 operations.
To deal with this the FIA issued directive “TD45” which states that any work undertaken by teams in other projects that benefits their Formula One operations must now be declared under the cost cap regulations.
Extra work on cost cap audit
Given the directive was issued with retrospective powers there are concerns that a number of teams will now struggle to meet the cost cap for last season which the FIA are currently auditing.
When the financial regulation came into force the FIA set the end of June as a target for the reporting for the previous year to be complete.
2022 was the first year the FIA audited the team’s spending yet their self imposed deadline was woefully missed resulting in end of season rumours and accusations being bandied around about a potential Red Bull major failure to comply.
Given the new technical directive Formula One’s governing body has even more ground to cover in this seasons audit following the submissions from the teams at the end of March.
F1 boss calls for FIA to ‘speed up’
In the real world corporations often have around nine months following their year end to complete their audits, so it could be the FIA have set themselves unrealistic targets because yet again the cost cap reporting ‘deadline’ has come and gone.
This week F1’s supremo called for the FIA to get its act together over the cost cap reporting following the leaks and rumours that consumed the paddock for weeks last season.
“Personally what I have asked is to anticipate as soon as possible the publication of the investigations made by the staff of the FIA.
”But I say this only because, in this way, it does not give rise to speculation and comments that are not good for anyone.”
Spending breaches require sporting penalties
Stefano Domenicali Alsop called for the regulators to switch any penalties awarded from being financial or based on technical restrictions as Red Bull have suffered and make the punishment sit within the sporting arena.
”I would like the penalty to be sporting in case of infringement, it is something we asked for very clearly,” Domenicali told Autosport.
“There are three regulations to be respected: sporting, technical and financial. Any infractions must be punished with sporting measures. You can’t go in other directions.”
Certain team bosses called for Red Bull to be punished for last years “minor breach” with points deductions or even taking away Verstappen’s championship from 2021.
Three teams rumoured in breach
Yet the rules for cost cap breaches were co-authored by the teams and the FIA and the were mostly against the use of sporting penalties unless the breach was severe.
This week German publication AMuS claimed up to three F1 teams wold be found this year to be in breach of the 2022 cost cap rules.
F1 Audit “still ongoing”
However, Craig Slater of Sky F1 reveals to day that the FIA has shot down these rumours and set the record straight.
“They are quite adamant in their response to me,” he stated to camera. They have said that the reports are factually wrong.
“They said that the auditing process is still ongoing with regards to the cost cap, and it is scheduled to conclude in the coming weeks.
“After which there would be a period required for assessment and finalisation of review.
FIA miss deadline again
It seems the FIA are excusing themselves from their self imposed reporting deadline of June now claiming it will take as long as necessary.
“They are saying that there is no deadline submitted to the teams for them to gain certification for the cost cap.
“The FIA are telling me that any suggestion of a delay to the process because of more in-depth investigation this year – these reports carry stories of the FIA investigating whether some teams are using other projects to mask development of F1 cars – the FIA tell me there is no delay because of that.
“Also, talk of potential breaches, at this stage, is unfounded.”
Retrospective TD may create breaches
The original report claimed the FIA investigators had arrived at factories unannounced to find evidence of teams breaking TD45 and straying into the grey area of other operations hiding engineers in separate projects such as road cars and boats.
Red Bull suffered the ignominy of being branded cheats amongst the many other derogatory names used to describe the world champions for a breach of the cost cap which in reality amounted to the team failing to categorise non-F1 spending properly such as catering costs.
Having seen the publicity feeding frenzy this created no team is likely to risk what Red Bull did last year, yet there are questions over whether the retrospective nature of TD45 may have caught a number of teams out pushing them over the prescribed limit of $140m spending limit.
— Formula 1 (@F1) July 20, 2023